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The measures are necessary to fulfil the terms of the European Data Retention Directive, the Home Office said today.

ISPs hope to recoup the estimated £75m cost of the scheme from the government.

Privacy advocates have called the government's proposals a massive potential invasion of privacy because theoretically the collected information will be available to some 500 central and local government bodies under the Regulation of Investigatory Powers Act.

Local councils have been criticised for using the Regulation of Investigatory Powers Act, which was brought in to fight terrorism, for catching fly-tippers and other minor law-breakers.

Separately, the government plans to issue a consultation on the Communications Data Bill early in 2009. This would set up a central database, possibly run by the private sector, to house the data that ISPs will collect. It is not clear whether investigators would use their own "black boxes" in ISP premises to siphon off the data, or whether ISPs would have to send copies of messages to the central store.

The intention of the bill is to give crime investigators direct access to all electronic communications in the UK and enable them to identify anyone's social networks and whereabouts at any time.

The Home Office has argued that this so-called Interception Modernisation Programme, which could cost £12bn, would merely restore the police's ability to eavesdrop on suspects' communications in the internet age.

Critics say it is likely to go further because it is a blanket measure that covers the entire population, rather than being aimed at a specific target.

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